Thursday, February 27, 2014

Thrifty Thursday-Living Debt Free

Most folks who are debt-free have to work at it.But the freedom it offers is well worth it. There are some practical ideas thatcan help you get there too.This recent news article caught my eyeand I thought it worthy of passing on. You can find the whole article here.

Whether you’ve resolved to get
debt-free in 2014 or you have a long way to go, it’s good to be
inspired. Look at people you know who are already living debt-free
lives. Whether it’s a friend, family member or co-worker, the person you
are thinking of probably shares similar qualities with other debt-free
people. Here are 10 common characteristics you can copy to live within
your means.

1. They Pay Attention to Details

You
won’t notice that recurring fee on your credit card for the gym you’ve
stopped using if you’re not checking your statement regularly. People
without debt monitor their personal finances closely. They are less
likely to waste money by forgetting about payment due dates or overdraft fees.

Try
looking at your credit card statements every month. Next monitor all of
your spending. Now add up your income. Compare the two and see where you
could cut back. Revisit this a few times a year to stay on track.

2. They Know Their Stuff

Debt-free
people do their own research. They might have an accountant, but they
don’t send over paperwork or sign their taxes without looking them over.
If you want control over your finances, you need to learn about them.
It may feel overwhelming, but the sense of security you will feel in
understanding what’s happening with your money will outweigh the
discomfort.

3. They Pretend They Make Less

Even
if you are already deep in debt, you can start to improve your
situation by immediately changing the way you look at your money.
Imagine you make 10%, 25% or even 50% less than you do. Make a budgetusing that math. It may be impossible at first, but start making cuts to your spending.

Debt-free people live on less than they make. This allows them to put money aside for buying a house, retirement and an emergency fund. This provides a financial independence that allows you more options in the future.

4. They Think Long Term

When
the focus isn’t on immediate gratification, you can make smarter
decisions. Sure, it would be nice to have this season’s hottest shoes,
but how will they help your long-term financial goals? This doesn’t mean
you can’t ever buy shoes. It just means you have to save up before you
buy them. This also gives you the time to consider if you really even
like the shoes and avoid impulse purchases.

5. They Aren’t Afraid to Ask

Ask
for help. Ask for lower interest rates. Ask for forgiveness when they
make one late payment. If you know someone who has met a
financial milestone you admire (saved $1 million for retirement, bought a
car in cash, etc.), don’t be afraid to ask how they did it.*We have experience with this idea. Just calling a companyto ask if the late fee can be waved really works if your overall credit is in good standing.

6. They Save

Whether
you got a significant bonus or a $25 check from Grandma, you should
think first of paying yourself. This is true of your regular paycheck as
well. You know you have to pay the rent (or mortgage), so treat your
savings account the same way. Make it a habit.

And better yet, make it a
mindless habit by setting up automatic deposit.

Debt-free people know
adding even small amounts now will give you more financial freedom
later.

7. They Set Goals

You’ll find it
easier to put aside money if you have a strong sense of what it’s going
toward. This works for when you are saving up for those shoes, planning a vacation
or thinking about retirement. Debt-free people set specific goals so
they know what they are striving for. This helps you stay on track. Think about what sounds appealing about retirement. If it’s travel,
imagine the places you will visit.

Now the goal seems more specific.

8. They Say No

You
may get lots of tempting offers throughout the week for lunch with
co-workers or dinner with friends. Don’t be afraid to say no. Debt-free
people know that saying no to smaller expenses can add up to big
savings. This doesn’t mean you can’t have any fun.

Host a potluck dinner
instead of trying out the new, expensive restaurant.

Meet up with
friends in the park for a walk instead of taking an expensive exercise
class.**This is simple to do. Staying focused on goals makes it easy to avoid "keeping up with the Joneses".We just don't feel that temptation.

9. They Know the Value of Cash

Debt-free
people know the value of a dollar… because they see it! It can be easy
to overspend when you are never seeing actual money. Having to part with
some cash can remind you the transaction you are making is real. Plus,
once that cash is gone, it’s gone. Try only using cash for a while and
see how it changes your perception of purchasing.

***10. They Value Experiences Over Stuff

Debt-free
people aren’t focused on things. They value experiences more than
having the latest things. The average person will list family and
friends high on what they value.

To
become debt-free, you are going to have to shed some of your current
bad habits and take on some new, more constructive ones. Use the people
who already living debt free as inspiration.***This is the item that's been easiest for us to follow.We'd rather make a memory than buy more stuff.Just say no to commercialism. Less to keep track of, less to maintain, less to clean, less to upgrade. It's still early enough in the year to make changes.If you want to get out of debt, or avoid acquiring it,put conscious effort into your choices.